Thursday, December 16, 2010

Crude Oil's Strong Resistance and the Return of the Clinton Administration

Wednesday's huge drop in crude oil inventory, the largest in 8 years, appeared to be all the oil bulls needed to finally push through the stubborn $90-$91 resistance level. But slumping gasoline sales in the U.S. and a less then desirable Spain Bond sale has most commodity traders shorting crude near the 90.76 level has they head out the door for the holiday vacation.


Even the return of the Clinton administration, well it sure looks like it doesn't it, was not enough to return confidence to the "if you can drop it on your foot and it hurts trade". Of course this is bringing out the "dollar as bottomed" crowd on every financial news channel. And while the dollar was lower in overnight trading stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term in the dollar.

So sit back and watch our President meet with the finest business leaders in the world and use these trading numbers for Thursdays trading......

Crude oil was lower overnight and trading below the 10 day moving average crossing at 88.54 signaling that a short term top might be in or is near. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 86.25 are needed to confirm that a short term top has been posted. If January renews the rally off November's low, May's high crossing at 93.29 is the next upside target. First resistance is last Tuesday's high crossing at 90.76. Second resistance is May's high crossing at 93.29. First support is Wednesday's low crossing at 86.83. Second support is the 20 day moving average crossing at 86.25. Crude oil pivot point for Thursday morning is 88.18

Natural gas was lower overnight as it extends the decline off last week's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If January extends the decline off last week's high, the reaction low crossing at 4.126 is the next downside target. If January renews the rally off November's low, the 38% retracement level of the June-November decline crossing at 4.654 is the next upside target. First resistance is last Thursday's high crossing at 4.637. Second resistance is the 38% retracement level of the June-November decline crossing at 4.654. First support is the overnight low crossing at 4.162. Second support is the reaction low crossing at 4.126. Natural gas pivot point for Thursday morning is 4.231.

Gold was lower overnight as it consolidates some of this week's rally. Stochastics and the RSI are turning neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 1372.10 would confirm that a short term top has been posted. If March renews this year's rally into uncharted territory, upside targets will be hard to project. First resistance is last Tuesday's high crossing at 1432.50. First support is the reaction low crossing at 1372.10. Second support is the reaction low crossing at 1352.00. Gold pivot point for Thursday morning is 1387.50.


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